Energy conservation and productivity growth: Can we have both?

Rapid multifactor productivity growth and strong improvements in energy efficiency have occurred simultaneously over long periods of time in the USA. Not so, however, after 1973 when energy efficiency made substantial gains while productivity growth languished. Based upon an examination of US data, this article argues that the key to achieving both energy conservation and multifactor productivity growth at the same time has been to use energy in conjunction with technologies that achieve more efficient means of combining all production inputs, instead of emphasizing technologies in which energy conservation alone is the over-riding objective.